Samsung Electronics stock falls despite record 107 trillion won operating profit

Samsung Electronics shares fell as much as 4.13% during intraday trading after the company announced that specific shareholder return execution methods will not be finalized until the end of January next year. Despite a record third-quarter operating profit of 107.44 trillion won, investors reacted to slowing growth rates and the delay in shareholder return plans.

Samsung Electronics has shown an unusual trend where its stock price plummeted despite recording all-time high performance. While the company achieved an "earnings surprise" with both revenue and operating profit exceeding market expectations, the result is interpreted as a wave of disappointed selling by investors after specific shareholder return execution plans were pushed to next year.

Record-breaking performance met with slowing growth rates

According to an analysis by economic YouTuber The Man Who Explains the Economy (Kim Kwang-seok TV), Samsung Electronics' confirmed third-quarter results are 195.25 trillion won in revenue and 107.44 trillion won in operating profit. These figures surpass the preliminary estimates of 195 trillion won in revenue and 107.4 trillion won in operating profit. In the context of South Korean economic history, this is a significant record, as no company has recorded a quarterly operating profit of this scale, excluding Aramco of Saudi Arabia.

However, the reaction in the capital market was cold. Although the absolute figures of the performance were historic, a "revaluation" factor emerged in terms of growth rates. The revenue growth rate slowed from the previous 130% to 126.9%, and the operating profit growth rate slowed from 1,800% in the second quarter to 782%. The Man Who Explains the Economy (Kim Kwang-seok TV) emphasized that stock price trends depend on the "growth rate of performance" rather than absolute increases, analyzing that the slowdown in the explosive growth expected by the market acted as a burden on the stock price.

Disappointed selling triggered by delay in shareholder return plans

Beyond the performance itself, the core reason driving the stock price plunge is the uncertainty regarding shareholder return policies. Through this announcement, Samsung Electronics stated it is pursuing shareholder returns of up to 110 trillion won this year, including dividends of approximately 30 trillion won. In particular, the decision to set dividends at more than 30 trillion won met market expectations.

The problem lies in the specific execution plan. While Samsung Electronics stated that the remaining resources for shareholder returns this year amount to 55 trillion to 75 trillion won, it announced that the determination of how to secure these resources and the specific execution methods will be finalized by the board of directors at the end of January next year. Investors expected specific timing and methods for shareholder returns to emerge through this conference call, but investor sentiment contracted sharply as the execution plan was delayed until next year. Reflecting this uncertainty, Samsung Electronics' stock price fell by as much as 4.13% during intraday trading.

Performance driven by DS Division amid business unit disparities

This performance by Samsung Electronics was led by the DS Division, the semiconductor business unit. The DS Division played an absolute role in driving the overall performance, accounting for a significant portion of the total revenue of approximately 200 trillion won. In contrast, the DX Division, which handles the consumer electronics and mobile businesses, showed a disparity in performance as it recorded a negative operating profit.

The Man Who Explains the Economy (Kim Kwang-seok TV) diagnosed that Samsung Electronics' revenue growth rate is maintaining a higher level than its competitor TSMC, and there is no doubt regarding the performance trend itself through 2027. However, he summarized that the performance structure concentrated in specific business units, the slowdown in growth rates, and the opacity of the shareholder return policy are the main backgrounds creating the current "Samsung Shock."

Source: original video (YouTube)